Revised Duties Imposed by U.S. on Chinese Solar Equipment

Oct. 11 (Bloomberg) -- The U.S. Commerce Department revised
penalties it will impose on solar-energy equipment imported from
China, increasing anti-subsidy duties it had previously
announced while adjusting tariffs on goods being sold at below
cost.

In a final determination yesterday, the agency set penalty
rates for Chinese producers, including Suntech Power Holdings
Co. and Trina Solar Ltd., after determining the companies had
benefited from government subsidies and had “dumped” their
products onto the U.S. market at below the cost of production.

The duties, the result of a complaint brought by the
American unit of Bonn-based SolarWorld AG, threatened to
exacerbate trade relations between the world’s two largest
economies. The countries have sparred over government support
for clean energy as President Barack Obama and Republican
challenger Mitt Romney each pledge tough action on China ahead
of next month’s U.S. election.

The Commerce Department said yesterday imports of
crystalline silicon photovoltaic cells made by Trina Solar would
be subject to duties of 15.97 percent, up from a 4.73
preliminary rate imposed in March, to counter Chinese government
subsidies. Duties imposed on similar goods produced by Suntech,
the world’s largest solar-power equipment maker, were increased
to 14.78 percent, up from 2.9 percent in March.

‘Subsidy Margins’

An anti-subsidy tariff of 15.24 percent was imposed on
solar goods from other Chinese exporters.

“We’re pleased with the margins calculated by the Commerce
Department, particularly the subsidy margins which increased
significantly on the entire Chinese industry,” Timothy
Brightbill, an attorney for Wiley Rein LLP in Washington who
represents manufacturers led by SolarWorld, said in an
interview.

The U.S. will also impose anti-dumping duties of 18.32
percent on the value of Trina Solar imports, a reduction from
the 31.14 percent penalty imposed in a preliminary finding in
May. Suntech faces anti-dumping duties of 31.73 percent,
slightly higher that a rate of 31.22 percent set in May.

“Unilateral trade barriers will not make any one company
more competitive, but will make solar less competitive against
other forms of generation,” Mick McDaniel, managing director of
Suntech’s U.S. unit, said in a statement.

Dumping Deterrence

An additional 59 Chinese companies will be subject to an
anti-dumping penalty of 25.96 percent, based on a determination
by the Commerce Department of how much below cost they were
selling their goods. All other Chinese producers will be subject
to a 249.96 percent rate to deter dumping.

Actual tariffs collected will be reduced by an adjustment
because the companies are subject to both dumping and subsidy
penalties.

The Commerce Department determined that most of the duties
should be retroactive, beginning 90 days before the date of the
preliminary findings. The U.S. International Trade Commission
next month is scheduled to decide whether China’s policies have
caused U.S. solar-energy manufacturers harm, a move that will
determine whether the duties announced yesterday will stand.

Yesterday’s penalties exempt tariffs when a portion of a
panel is made outside of China, leaving a potential loophole,
according to Senator Ron Wyden, an Oregon Democrat who heads the
Senate Finance Committee’s trade subcommittee.

Additional Measures

“I will be monitoring the impact of this determination
closely and will pursue additional measures if necessary to
protect American manufacturers and workers,” Wyden said in an
e-mailed statement.

Critics of SolarWorld’s complaint disagreed.

“We are gratified that the scope of today’s decision is
limited only to solar cells made in China and that the
Department did not significantly increase the tariff from its
preliminary decision in May,” Jigar Shah, president of the
Coalition for Affordable Solar Energy, a group that opposed
SolarWorld’s complaint, said yesterday in a statement.

Penalties on imports have split the U.S. solar industry,
pitting a group of manufacturers led by SolarWorld against
developers and installers of the goods, who benefit from lower-priced imports.

Brinser of SolarWorld told the U.S. ITC on Oct. 3 that the
Chinese government has provided unfair support for its domestic
solar-manufacturing industry, leading to a price collapse that
has caused U.S. plants to shut.

Opponents of the complaint including SunEdison LLC, a
subsidiary of MEMC Electronic Materials Inc., say SolarWorld
failed to adapt to a rapidly changing business climate, marked
by a decline in U.S. government incentives and increased
competition from other energy sources including natural gas.